Recreation and leisure have become increasingly important in modern life. But the law relating to easements is conservative in nature and, although Re Ellenborough Park [1956] Ch 131 broke new ground by establishing that a right to use communal gardens qualified as an easement, it was widely believed that wider recreational rights were not capable of doing so.
However, thanks to Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57; [2018] PLSCS 198, a whole new species of easement has been born. The litigation gave the Supreme Court its first opportunity to consider Ellenborough Park, as well as the law in jurisdictions that do recognise recreational rights as easements.
Its decision brings English law fully up to date and, in recognising rights to use a wide range of recreational facilities as an easement, the court has boldly gone where no court has gone before.
Ambitious undertaking
Broome Park, near Canterbury, Kent, is a mansion house surrounded by a substantial country estate and once belonged to Lord Kitchener. It was converted into a timeshare and leisure complex in 1979, and the initial success of the scheme led to the creation of additional timeshare units in the grounds. The new units were constructed on land that was transferred to a separate company together with a right to use the gardens, outdoor swimming pool, golf course, tennis and squash courts, the indoor leisure facilities at ground floor level and below, and any other sporting or recreational facilities on the surrounding estate.
Were the rights, which were granted to maximise the proceeds of sale from the timeshare units, capable of constituting an easement? If not, the owners of Broome Park, which has changed hands and is now a hotel, and the golf course operator would be entitled to charge for the use of their facilities.
The High Court decided that the timeshare owners had been granted an easement over all the facilities. However, the Court of Appeal was not prepared to go quite so far. It analysed the rights separately, upholding the rights over the outdoor facilities, but rejecting the rights claimed over a new indoor swimming pool, and refusing to recognise the rights claimed over the gym, sauna, sunbeds, billiard room, TV room, restaurant and lavatories on the ground and basement floors of the mansion house as easements.
Characteristics of easements
Lord Briggs spoke for the majority in the Supreme Court. He accepted that the parties had intended to confer property rights, rather than personal rights, and that the court should strive to give effect to contracts, where possible. However, several arguments stood in the way of recognising the rights as an easement.
It was suggested that the rights benefited the timeshare owners as individuals; they were enjoyed for their own sake and did not serve the timeshare land. But the court had no doubt that the rights benefited the timeshare land as well, especially as holiday timeshares are recreational in nature.
Were the rights so extensive that they ousted or deprived the owners of Broome Park of beneficial use, possession or control of their land, because the timeshare owners would be entitled to step in if the owners were to stop managing and maintaining the facilities? If so, the rights could not take effect as easements. Lord Briggs explained that this was not a problem because the “ouster” test must be applied at the time of the grant and not to subsequent step-in rights (which enable grantees of easements to carry out necessary work only, in a reasonable manner).
Another distinguishing characteristic of an easement is that the owner of the burdened land should not have to spend money or take any positive action to enable rights to be exercised (although it may choose to do so for its own benefit), and these facilities were expensive to maintain and required intensive management.
However, unlike rides on a miniature steam railway, use of an artificial ski slope or adventure rides in a theme park, the owners of Broome Park did not need to manage and maintain the facilities to enable the timeshare owners to make some meaningful use of them. Some facilities might not be useable indefinitely, should they cease to do so, but that did not prevent the rights from taking effect as an easement.
Single grant
The court ruled that the rights should be interpreted as a single grant (as opposed to separate rights over each of the facilities). Furthermore, they took effect immediately, even though the facilities might change over time. So the rule against perpetuities (which was in force when the rights were granted and could have prevented the timeshare owners from using the new indoor swimming pool and any other new facilities) did not apply.
The timeshare owners had the right to use all the indoor and outdoor facilities, including any fixtures, chattels or equipment supplied, for their enjoyment. The restaurant and toilets, viewed on their own, were not recreational or sporting facilities. However, they were part of the leisure complex, and the parties could not sensibly have intended to exclude access to them.
The court accepted that there might be better ways to confer recreational rights on timeshare owners, given that the rights would endure indefinitely even though the timeshare units would not. But recreational activities are clearly beneficial to modern life. Therefore, despite Lord Carnwath’s strong dissenting judgment (in which he described the rights claimed as “permanent membership of a country club” and expressed concern about their impact on the parts of the estate that remained undeveloped), the court decided to uphold the recreational rights, rather than invalidate them.
Allyson Colby is a property law consultant